ACOSS calls on government to dump plan to cut payments for young unemployed people and focus on jobs

The Australian Council of Social Service is calling on the Federal Government to drop its damaging plan to deny young unemployed people access to income support for six months after analysis from the Department of Social Services that it will lead to a 24% increase in demand for emergency assistance.

“This is a shocking revelation that government policy makers are well aware that many more young people who can’t get paid work will be forced into begging for charity when they are cut off income support. It makes no sense for the government to pursue a policy that will cause this level of hardship and does little to give young people a sense of hope and self worth through getting a foothold into a real job,” said ACOSS CEO Dr Cassandra Goldie.

“Frontline agencies working with young people looking for work have made clear that depriving young people of payments and employment services will make it tougher for them to get ahead, especially those with no family support or from in families living on low incomes.

“The focus should be on opening up job opportunities for our young people, in collaboration with business leaders, investors, local communities and social services to give young people hope, and help them get a foot in the door.

“A more effective way to address youth and long term unemployment is to invest in overcoming skills and capability related barriers to work. Instead of penalising young people the government should invest in programs we know to be effective like Youth Connections which has been discontinued. They should also increase the availability of places in cost-effective wage subsidy programs like Wage Connect.

“It’s disappointing that the Budget has cut funding to important career counselling and vocational programs such as Youth Connections, which has assisted over 74,000 young people since 2010. Ninety-three per cent of participants in this program were still engaged in study or paid work six months after completing the program in 2012 with most no longer receiving Centrelink payments.

“Similarly, 47% of people out of work for over two years assisted by the Wage Connect wage subsidy scheme retained their positions after the program ended, which is more than double the results achieved under the work for the dole scheme.

“The government has announced that it will pay subsidies of up to $10,000 over two years to employers who hire mature workers over the age of 50. This initiative should be extended to other groups locked out of the labour market, including young people.

“With the rate of unemployment among 15- to 24-year-olds more than double the overall rate (12.5%), and the Fair Work Commission noting that earnings inequality is on the rise as it handed down its minimum wage decision yesterday, it’s time for a new approach.

“The main reason for high youth unemployment is that young people were worst affected by the global financial crisis. The overall number of jobs for 16 to 19-year-olds was still below 2007 levels five years later. Employers want experience but it is difficult for young people to gain experience if they can’t get entry-level positions.

“Strengthening support and investing in programs will save us more in the long run because more young people will be able to overcome the barriers they face to entering the workplace and would reduce the need for emergency support. Investing today in their futures will save us more in the longer term.

“We urge the government to rethink its current policy of withdrawing income support and work with business leaders, local communities and frontline agencies on solutions that work,” Dr Goldie said.

Media Contact: Fernando de Freitas 0419 626 155